Time to end free banking? Poll help needed

meher

keep things as they are; I find idea of the have-nots who borrow more than they can afford to, paying for my banking, quite thrilling and entertaining

by the way I am not clear if investments are included in the banking we speak about; if I'm charged for investments, then no more investing in UK banks, will continue with my fave bank BMI, it is iranian have you noticed that islamic banks have never been affected by recession

ps: sorry I didn't realise it was not a poll, but suggestions thread

Idiophreak

Lokolo wrote: »

^^ This.

Annual Costs:

£24 a year general account charge. This comes with a card and internet banking.
£24 for an overdraft where you will pay interest at Base Rate + 1%
£3 for cheque book
£12 a year for telephone banking and the line is 0800 number.

Something like that.

Ah yes, can we put this down as an option filed under "The Ryanair Model"

Hooloovoo

Linton wrote: »

The trouble with all this hidden charging is that there is no way to compare the efficiency of individual banks. So there is little market pressure on banks to become more efficient. So, if people paid directly for the service they used they would overall be better off.

Linton wrote: »

People would migrate to the banks with lowest charges which would lead to a general downward pressure on charges. This cant happen now because the charges are hidden.

Aside from the point mr_fishbulb makes, that we are assuming direct-charges will be offset by greater returns elsewhere, I feel there is a much more difficult problem.

I agree the banks could not price-fix amongst themselves without it being obvious that some sort of cartel arrangement was in place.

That means all banks will have a different charging structure. All banks will also have different interest rates, as they do now.

The practical upshot of this being it is now much more difficult for customers to compare rates of return between different banks. Rather than just comparing the interest rate, you now have to compare the interest rate and subtract what the bank are going to charge you for the service.

Instead of having a quick look at several different banking products and choosing the best interest rate, I now have to produce a spreadsheet and factor in the monthly cost, potentially have to estimate how many transaction I might make, and all sorts of other things depending on the charging structure.

No one likes hidden charges. But be careful what you wish for, because the alternative might well be worse.

Marisco

missprice wrote: »

I don't care if the banks charge fees
so long as I can go back to being paid in cash every week:p

Yes I realise thats never going to happen.
as for banks providing branches and ATMs and phone banking costing money, well they been doing that for years and they still made vast profits until the crash

Cash wages is the way to go:T

Honestly???:eek: I don't think I could manage now if I had it in cash! It's been so many years since I had to pay things out I think I've forgotten how to!!:D Everything gets paid on the first of the month, by DD or SO, so I know that what is left is mine. I really couldn't be doing with flaffing around going from place to place shelling out cash for the bills. Apart from that, where do you pay it to?

Donkeys years ago you could actually go into the Gas/leccie shop and pay over the counter, but there aren't any left now!! There was a thread on DT about could you do without the banks, and the consensus of opinion was that you couldn't. I just don't think, because they have you by the short and curlies, that they should charge you for having an account, especially if you keep it "in the black" :mad:

ALIBOBSY

I was wondering how the new santander product works. You pay a monthly fee, but get so much credited back depending on how much direct debits etc come out of the account-I assume the banks charge the utilities etc for direct debits and this is how they make some money back on these payments-but being automated they are very low cost.

Could there be a system where you pay so much a month, but get "credits" back to reduce the fee when you say make certain numbers of direct debits/keep a min balance/pay in a min amount/not going overdrawn. So encouraging people to use their accounts better?

Ali x

The_One_Who

MSE_Martin wrote: »

Many policy wonks are calling for the end of 'free' banking?

That's not insulting at all, is it? And you asked for polite suggestions?!

1. Have free banking for those who keep a minimum amount (£100?) in their account.

2. Charge those who use services like overdrafts.

3. If they have to charge something, make it a small monthly amount (£2?) for basic services like having free cash withdrawal, standing orders, etc. Charge more for those who use overdrafts.

missprice

Marisco wrote: »

Honestly???:eek: I don't think I could manage now if I had it in cash! It's been so many years since I had to pay things out I think I've forgotten how to!!:D Everything gets paid on the first of the month, by DD or SO, so I know that what is left is mine. I really couldn't be doing with flaffing around going from place to place shelling out cash for the bills. Apart from that, where do you pay it to?

Donkeys years ago you could actually go into the Gas/leccie shop and pay over the counter, but there aren't any left now!! There was a thread on DT about could you do without the banks, and the consensus of opinion was that you couldn't. I just don't think, because they have you by the short and curlies, that they should charge you for having an account, especially if you keep it "in the black" :mad:

Honestly it would never work but it was just a thought.
I was just throwing out a different view than the banks charging,
btw other countries banks do charge small fees for everything and they manage and no one has a problem with it in those countries
from memory which is flawed it used to be a couple dollars for a chequebook (who uses these anymore?)
5 cents for a withdrawal
10cents for DDs and similar for SO
cannot remember overdraft fees
but for me right now (not overdrawn, no chequebook) that would amount to around .1.50 a month.
however I suspect that the banks may well use the fees as a better means of making money than mis selling PPI:rotfl:

Marisco

Linton wrote: »

For the bank to provide computers, branches, cash machines, help desks etc costs money. That money can only come from the customers. Banking cannot be really free, someone somewhere is paying for it.

You are paying charges by not receiving the interest that the bank is earning from the money you hold with them. You are paying charges by receiving a lower rate of interest on your savings than would otherwise be the case. You are paying charges because business customers are charged and they add in those costs to the cost of the goods you buy.

The trouble with all this hidden charging is that there is no way to compare the efficiency of individual banks. So there is little market pressure on banks to become more efficient. So, if people paid directly for the service they used they would overall be better off.

So if these charges come in, can we expect interest on savings to go up and businesses to cut their prices? Yeah right!!

Jojo_the_Tightfisted

There should be an option to go back to dealing in cash with no penalties for doing so, or it effectively becomes a tax upon being alive.

So nobody can be forced into having a bank account. Not for wages, benefits, no elevated charges for being restricted to key meters, etc.

opinions4u

The majority of people will be worse off if any changes along the lines of those suggested are made.

On that basis alone, I'm out.

We can have focus groups, policy supremos, over-educated philosophers and consumer groups making noises all they like.

Bank charges are, in the overwhelming majority of cases, optional. You don't have to pay them. You choose to put yourself in a position where you pay them.

Allowing banks to charge for something they currently offer for free (in return for lower charges elsewhere) will end up with two things. More resentment from consumers and bigger profits for banks.

Is that really a good idea?